Kaiser Permanente Paying $11.5M in Equal Pay, Racial Equity Case

Kaiser Permanente in Oakland, California has agreed to pay $11.5 million to settle claims it illegally denied thousands of Black employees equal pay and promotions, according to an announcement from the plaintiffs’ law firms.

The settlement, which requires court approval, would resolve a class-action racial discrimination lawsuit alleging that the bias impacted over 2,000 Black employees in administrative support and consulting services positions at Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, The Permanente Medical Group, Inc., and the Southern California Permanente Medical Group.

Several Black employees have claimed that racial discrimination in the workplace has been going on for over a decade in the identified job families, according to local news sources. One plaintiff, for example, said that she took a demotion to escape “blatant racism” occurring in a specific department.

The four plaintiffs in total—two current employees and two former employees—will receive a portion of the settlement money after legal fees.

In addition to monetary relief, Kaiser also agreed to establish workplace programs to ensure “fair and equitable” compensation and advancement opportunities for Black employees.

In the future, the health system will retain an independent consultant to “develop and manage a thorough job analysis review to be completed within one year.” The review will be used to create additional equitable opportunities for Black employees, including career development guides and developmental resource guides for roles within administrative and consulting services, the law firms stated.

Additionally, Kaiser has agreed to conduct an annual pay analysis for three years using a third-party consultant who will review “with an eye toward equity and swift remediation of any existing disparities.” The health system will also continue annual pay reviews and appoint an internal compliance officer to oversee implementation of the policies and continued compliance with the settlement agreement.

Some structural changes the health system promised per the settlement agreement include investing in more leadership development initiatives for historically underrepresented groups, providing additional training for employees and management on racial bias and equity, including Upstander Intervention and racial equity trainings, and debiasing programs for those engaged in enforcing company policy on equal employment opportunity.

“As an African American current employee, I have come forward to raise issues of racial equity to make our workplace stronger,” said Charleta Dabrowski, a plaintiff in the class-action lawsuit. “I support new programs dedicated to ensuring equal pay and fair opportunities for Black, Indigenous, and People of Color at Kaiser Permanente.”

In response to the announcement, senior vice president and chief human resources officer at Kaiser Christian Meisner said on behalf of defendants, “As a mission-driven organization, we hold ourselves accountable for living our values by strengthening our inclusive culture and expanding our work to address any disparities and their root causes. That is why we invited Plaintiffs to participate in a negotiation process that led to this settlement.”

The health system is bolstering its efforts to “to advocate for fair and just treatment, opportunity, and advancement as well as embedding accountability for equity at all levels of the organization. We will continue to promote positive change, equity, and total health for all – inside our organization and within our communities,” Meisner added.

The settlement comes as new HHS Secretary Xavier Becerra stressed the problem of racism on public health. Becerra made the statement shortly after a jury reached a verdict in the case against Derek Chauvin over the death of George Floyd.

"We at the Department of Health and Human Services stand with marginalized communities to provide support and do our part to ensure that health and well-being are treated as a right and our systems are actively furthering justice,” Becerra stated.

The next step for the settlement agreement is for the court to set a hearing date for preliminary settlement approval.